Creditsafe pays £1m to HMRC under ‘Diverted Profits Tax’
Credit: Caerphilly Observer
Caerphilly-based credit referencing company Creditsafe has paid Her Majesty’s Revenue and Customs almost £1 million after it was served with a ‘Diverted Profits Tax’ charge.
Registered as Creditsafe Business Solutions, the company, based at Caerphilly Business Park, sells business data for credit check purposes and other uses.
According to full year accounts for 2017, filed at Companies House, the firm entered a transfer pricing review with HMRC for the year ending 2015.
Transfer pricing is a mechanism which sets the price of goods or services for when subsidiaries of a company trade with one another.
Creditsafe Business Solutions is part of the wider Safer Information Group, registered in the Netherlands, and has 16 offices across Europe and America.
The diverted profits tax charge of £974,000 meant that pre-tax profit for the year was £7.8m, down slightly from 2016’s £8.1m.
Turnover for the year had increased to £39.4m from £35.5m in 2016.
In a report accompanying the accounts, Managing Director Cato Syversen said discussions were still ongoing with HMRC regarding other years the company could be liable for a diverted profits tax charge.
On overall results, he wrote: “In 2017 we achieved a 96% return on 2016 sales. We are budgeted to maintain this in 2018 and in turn we are expecting sales to increase by a further 13%.
“Our successful customer retention rate is a result of quality customer service and experience. The Creditsafe Group has invested significant amounts in developing our product and marketing functions, which is improving our position in the marketplace. We have had excellent feedback from employee surveys stating how engaged our staff members are, which is evident from our low staff turnover.”
Chris Robertson, UK CEO, Creditsafe said: “We’re really pleased to see that it’s been another year of continued growth for Creditsafe.
“With both revenues and profit increasing steadily, we’re on track to continue this positive trajectory into next year.”
In a separate statement regarding the HMRC payment, a spokeswoman for Creditsafe Group said: “Creditsafe has been engaging with HMRC openly and collaboratively regarding transfer pricing policies.
“The payment was part of the normal enquiry process and the company expects that there will be a significant repayment to the company when the enquiry is concluded.”
The Diverted Profits Tax scheme was introduced in 2016 by then Chancellor George Osborne as a means to ensure multinational operations paid tax on their profits made in the UK.
This came after criticism that companies such as Google, Amazon and Starbucks were using tax avoidance schemes.